US stocks tumbled on Friday as investors dumped riskier assets on renewed concerns over the global economic recovery after a new coronavirus and possibly vaccine-resistant coronavirus variant was identified in South Africa. The Dow Jones sank 2.5% to near levels not seen since October 14th, the S&P 500 dropped 2.3% getting closer to values observed at the end of October, and the Nasdaq Composite declined 2.2% to levels seen on October 29th. Cyclicals, Travel-related, and small-caps were among the biggest losers, namely Royal Caribbean (-13.2%), United Airlines (-9.6%), American Airlines (-8.8%), American Express (-8.6%), and Boeing (-5.4%). Meantime, vaccine-related and stay-at-home stocks cushioned the falls. Moderna jumped 20.6% and Pfizer shares rose 6.1% while Zoom traded 9.1% higher and Verizon gained 0.3%. On the week, all three main averages booked losses, Dow Jones closed 2.0% lower, the S&P fell 2.2%, and the Nasdaq Composite plunged 3.5%.
Japanese Market on Friday, with both averages closing at 1-month lows as a new COVID-19 variant unnerved investors already reeling from global growth concerns and expectations of higher US interest rates. All sectors fell, led by losses from transportation stocks Ana Holdings (-4.51%), Japan Airlines (-6.48%), Keisei Electric Railway (-6.03%), Nippon Yusen (-1.86%) and Kawasaki Kisen (-2.63%). Other Japanese heavyweights in the technology, auto and retail sectors also declined, with sharp losses from Lasertec (-4.45%), SoftBank Group (-5.19%), Tokyo Electron (-2.31%), Fast Retailing (-3.29%), GRCS Inc (-9.65%), Toyota Motor (-1.78%) and Hitachi (-2.92%).
The FTSE 100 tumbled 3.6% to the 7,044 mark on Friday, its lowest level since October 6th, and snapping a four-session rally, as investors dumped risky assets amid growing concerns over a new and possibly vaccine-resistant coronavirus variant identified in South Africa, Botswana, and Hong Kong. Travel-related stocks led the losses as Britain announced a temporary ban on flights from South Africa and several neighboring countries, a move that was followed by Israel and Singapore and could prompt other nations to follow suit. On the week, the key British stock index pared the gains, to close 2.5% lower.
European stocks plunged more than 3% to six-week lows on Friday, with Frankfurt’s DAX closing 4.2% lower and the pan-European Stoxx 600 finishing 3.7% lower in its worst session since June 2020, amid concerns over the spread of a newly identified and possibly vaccine-resistant coronavirus variant. Likely originating from South Africa, the variant has been found across several nations, which raised concerns about the likely return of travel restrictions, already being rolled back by the UK and other countries, and added downside risks to the outlook for the economic recovery. Accordingly, travel and leisure stocks plunged 8.8%, with cruise operator Carnival leading losses (-16%), a trend also seen in oil and metal stocks. On the other hand, pharmaceutical stocks clearly benefited from the news, with Swiss online pharmacy group Zur Rose Group up 8.6% and the Luxembourg-based lab testing firm Eurofins Scientific climbing 7.9%.
The CAC 40 Index sank 4.8% to close at 6,739.73 on Friday, the lowest since late October, amid a global rout in in equity markets triggered by heightened pandemic woes following the discovery of a new, possible vaccine-resistant coronavirus variant in South Africa. The European Commission has called for its member countries to interrupt travel from southern Africa, as investors keep an eye open for further restrictions that may affect business. Meanwhile, France reimposed the mandatory usage of face masks, and opened the booster shot availability for all adults. On the corporate front, travel and lodging industries took the hardest hits, as seen in Airbus (-11.5%), Vinci (-8.5%), Air France – KLM (-9.7%), and Accor (-8.9%). On the other hand, firms that work with medical diagnosing booked gains, led by BioMerieux (4.8%), Eurofins Scientific (7.9%).
The BSE Sensex slumped by 1687.94 points or 2.87%, to close at 57,107.15 on Friday, tracking the weak global market. It was the biggest loss since April 12th of 2021 as investors dumped domestic equities and sought safe assets like bonds amid concerns of new and possibly vaccine-resistant COVID variants in South Africa. Investors worry that the new variant is likely to impose renewed lockdowns and weigh heavily on the fast recovery of the domestic economy. 26 out of 30 stocks on BSE Sensex ended in the red. Among the individual stocks, IndusInd Bank dragged the most (-6.01%), followed by Maruti (-5.27%), Tata Steel (-5.23%), National Thermal Power Corporation (-4.84%), and Bajaj Finance (-4.6%). On the other hand, shares of pharma stock Doctor Reddy’s Laboratories (+3.32%) surged amid expectations of higher sales, followed by Nestle India (+0.35%) whereas Asian Paints (+0.01%) and Tata Consulting Services ended largely flat. On the week, the BSE fell by 4.2%.
The Shanghai Composite Index fell 0.56% to close at 3,564 while the Shenzhen Component Index shed 0.34% to 14,777 on Friday, as investors turned cautious amid concerns over a new and possibly vaccine-resistant COVID-19 variant detected in South Africa, as well as an uptick of local cases in eastern China. Markets were also unnerved by rising tensions after the US government blacklisted Chinese firms on allegations of helping the Chinese military’s quantum computing efforts, while Chinese regulators asked Didi to delist from the New York Stock Exchange on data security fears. Tourism, consumer staples, real estate, energy and semiconductor firms led the market’s declines. Meanwhile, Chinese new energy firms mostly advanced as the shift towards clean energy gained momentum.